New UK law to jail "reckless bankers"

Monday, March 07, 2016 - 01:39

New regulation to hold bosses responsible for wrongdoing at British banks come into force. As Grace Pascoe reports, some experts say they're deterring some bankers from taking on senior management roles.

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Britain is getting tough on its bankers.
The new Senior Managers Regime comes into force this week making top bankers accountable for misconduct at their companies.
But will the rules stop some from seeking those top positions?
Mike Ingram is from BGC Partners.
SOUNDBITE (English) BGC PARTNERS, MARKET ANALYST, MIKE INGRAM, SAYING:
"I think there are certainly some who might be put off being promoted into a senior managerial position... I'd be rather worried about the reaction of non-executive directors who don't necessarily have the day to day hands on experience that executive managers might have but are equally in the senior managing regime."
Punishments now include fines and bans from the industry.
As well as up to seven years in prison for "reckless decisions" that cause a bank to fail.
About 10,000 senior staff from 900 banking companies will be affected.
They'll have to sign a legal duty of responsibility for their units.
SOUNDBITE (English) BGC PARTNERS, MARKET ANALYST, MIKE INGRAM, SAYING:
"I fear that this piece of legislation whilst on paper is a very, very good thing may actually have some very perverse and unfortunate consequences."
The aim of it is to end scandals of the past like Libor rate rigging and quell public anger.
There was plenty of that after the financial crisis of 2008.
Even though taxpayers had to bailout some banks and others were heavily fined - very few individuals were punished.

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